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OTT: Serving 2.5 Million Years Of Mobile Video Every Year

18 October 2016

6 min read

Live streaming is taking over. Video streaming is everywhere. New content and services seem to be announced everyday.

But as more and more content moves from the cable box to the Internet something else is happening too: OTT is blowing IPTV out of the water. Starting in 1995, when IPTV was founded, it was expected to represent the future of watching videos. But this has changed, and now, OTT is projected to be a $64 billion industry by 2021.

Wait- What is IPTV?

To many of you, IPTV is basically the same thing Cable TV. Though they aren’t exactly the same, it’s easy to think they are because they work the same way for viewers. In both scenarios, you just point your remote at a “cable box” and the TV changes channels. For now, the technical differences between Cable and IPTV aren’t important. But, if you watch TV using Xfinity, U-Verse or FiOS, you’re actually watching IPTV, not Cable.

But, the user side is flooded with issues. Since IPTV is a closed network that’s not generally available, you can only watch IPTV from a device (“cable box”) made by the IPTV network operator. Lack of ability to watch shows anywhere (laptop, smartphone, etc.) and relatively limited content are two big negatives of IPTV.

OTT on the other hand, runs on unmanaged, decentralized networks. Because OTT’s uses a public network, it can struggle with problems like lack of available bandwidth or delivering to the last mile, issues that don’t exist for IPTV. Sometimes, this can lead to content being unavailable or very low resolution video quality.

However, it also means that users don’t rely on a “cable box” to stream content (think Netflix or HBO Now). With OTT, streams can be viewed on virtually any device (set top box, TV, computer, smartphone, etc). There is also more content available on OTT networks. Between specialized content and easier licensing capabilities for different markets and languages, OTT has a much larger viewing library. With more content and easier viewing, OTT has become another way for networks to find viewers.

OTT Viewership Potential & The End of Show Dumping

One of the long standing traditions in the advertising industry is selling eyeballs. Generally speaking, the more eyeballs watching a video, the more an advertising segment is worth. This explains why Super Bowl ads are so expensive.

Today, numerous content owners are looking to OTT networks to increase their number of eyeballs reached, and therefore, potential ad revenue. Perhaps the best example of this is the NFL selling the rights to stream Thursday Night Football to Twitter, adding an online complement for its TV broadcast. The deal is viewed as a test by many, as the NFL explores the added value of OTT solutions in the near term and eventual transition to an OTT first strategy in the long term.

This comes in the era of “show dumping.” In a global study of over 5,000 TiVo subscribers, 37% have stopped watching some TV shows because they became too difficult to access. The answer to this problem: make it as simple as possible to watch shows by putting the content everywhere the viewer exists. This strategy is one of the biggest drivers of OTT growth.

And Oh How It’s Growing

Just how big is this OTT industry going to be? Numerous sources project over 20 Exabytes a year of mobile video consumption a year by 2020. That’s 160 quintillion bits. Since it’s hard to imagine just how much data that is, here’s a rough estimate: it’s more than 2.5 million years of video per year on mobile devices alone. Don’t forget a key part of that statement - mobile devices alone. Add laptops, TVs, Video Game Consoles, OTT-specific devices like Roku or Chromecast, and you have an even larger number.

With all of this content and numerous OTT offerings, a new problem looms. Remember, OTT uses a public network that can struggle with related problems, including lack of available bandwidth and other content delivery issues.

Video Streaming Delivery

The problem of content delivery is not a new one. If you tried to watch Game of Thrones on HBO Now on a Sunday in 2016, chances are, your stream struggled. Unfortunately, this is the rule, not an exception. There just isn’t enough bandwidth today to handle all of the traffic, especially during big releases and popular live streaming events.

Like OTT providers, content publishers have tried to fix these delivery woes in numerous ways. First, they bought more capacity, but it wasn’t enough. Then they started offering adaptive bitrates so that instead of rebuffering, user stream quality would get degraded. Next, they switched to Multi-CDN architectures. But, none of these solved the problem. In a sense, these solutions didn’t even attempt to solve the real problem, they just tried to mask it. So what’s the underlying problem? The servers!

While these “solutions” try to improve streaming, they still rely on traditional HTTP servers. Today, servers just can’t handle the bandwidth requirements. Though servers keep getting better, bandwidth growth is outpacing server improvement. This problem has been around for a long time, and it won’t be solved by servers anytime soon.

That’s why, at Peer5, we built a Serverless CDN. Instead of relying on servers to deliver your OTT streams, we deliver content using your viewers. Instead of struggling to deliver content when you have lots of traffic, with Peer5, more traffic means better delivery. By replacing servers with this peer-to-peer method of content delivery, there is finally a feasible solution to the video bandwidth nightmare that has been frustrating streamers for years.

The Result

OTT is taking over and interest in IPTV is waning. With more content, that is viewable anywhere, this transition has been coming for a long time. Now with one of OTTs biggest problems, content delivery, finally getting a viable solution, expect OTT to grow even bigger and faster.

Streaming is dead, long live streaming.

Peer5’s Serverless CDN supports massively-scaled live and on demand video streaming. As the demand for ever increasing amounts of delivery capacity continues to grow unabated, no single CDN is able to provide all of the capacity, features, geographic coverage and uptime that broadcasters need. Hence, the growing momentum behind a Multi-CDN architecture and the load-balancing, redundancy and feature completeness advantages that this approach affords.

Our novel peer-to-peer (P2P) solution solves the peak demand problem by creating a network that actually gets stronger as viewership increases. This means that we perform our best at the exact moment when traditional CDNs struggle the most – making Peer5 the perfect complement to a broadcaster’s existing CDN infrastructure. If you’re looking to improve delivery for your own OTT solution, register for a Peer5 account here.